ArticlePDF Available

The Role of Cooperative in the Indonesian Economy

Authors:
  • Universitas Islam Kebangsaan Indonesia

Abstract and Figures

This study aims to evaluate descriptively the existence and role of cooperatives in the Indonesian economy. In 2016, the number of cooperatives in Indonesia reached 212,135 units with a total membership of 15% of the total population of Indonesia. 30% of cooperatives in Indonesia have been inactive for various reasons. The cooperative has contributed less than 2% to the Indonesia's gross domestic product and offered 0.5% job vacancy for the entire working population of Indonesia. The following suggestion is provided for further enhancing the contribution of the cooperative to the Indonesian economy, namely: (1) Increasing the participation of cooperative members; (2) Providing a conducive climate for cooperatives, access to finance and business development; (3) Increasing counseling and training for managers, supervisors and apparatus for cooperatives ; and (4) Encouraging Micro-Small and Medium Enterprises (MSMEs) to establish secondary cooperatives.
No caption available
… 
Content may be subject to copyright.
International Journal of Humanities and Social Science Invention
ISSN (Online): 2319 7722, ISSN (Print): 2319 7714
www.ijhssi.org ||Volume 6 Issue 10||October. 2017 || PP.43-46
www.ijhssi.org 43 | Page
The Role of Cooperative in the Indonesian Economy
Azhari 1 Mohd. Nur Syechalad2, Ishak Hasan3, and M. Shabri Abd. Majid4*
1(Ph.D Scholar, Faculty of Economics and Business, University of Syiah Kuala, Indonesia)
2(Lecturers, Faculty of Economics and Business, University of Syiah Kuala, Indonesia)
3(Lecturer, Faculty of Economics and Business, University of Teuku Umar, Indonesia)
Corresponding author: mshabri@unsyiah.ac.id
Abstract: This study aims to evaluate descriptively the existence and role of cooperatives in the Indonesian
economy. In 2016, the number of cooperatives in Indonesia reached 212,135 units with a total membership of
15% of the total population of Indonesia. 30% of cooperatives in Indonesia have been inactive for various
reasons. The cooperative has contributed less than 2% to the Indonesia's gross domestic product and offered
0.5% job vacancy for the entire working population of Indonesia. The following suggestion is provided for
further enhancing the contribution of the cooperative to the Indonesian economy, namely: (1) Increasing the
participation of cooperative members; (2) Providing a conducive climate for cooperatives, access to finance
and business development; (3) Increasing counseling and training for managers, supervisors and apparatus for
co-operatives; and (4) Encouraging Micro-Small and Medium Enterprises (MSMEs) to establish secondary
cooperatives.
Keyword: Cooperative; member; capital; turnover; economic growth; labor; Indonesia
---------------------------------------------------------------------------------------------------------------------------------------
Date of Submission: 16-10-2017 Date of acceptance: 31-10-2017
---------------------------------------------------------------------------------------------------------------------------------------
I. Background
The cooperative in Indonesia was first established in 1896 by a Mayor in Purwokerto (Nasution, 1990).
The establishment of a cooperative at that time was to protect the citizens from being trapped in loan sharks.
Type of established cooperative was saving and loan cooperatives. This business entity developed into the
agricultural sector cooperatives. Then in 1908 and 1911, Boedi Oetomo and Syarekat Islam advocated
establishing a cooperative as a means of economic struggle at the time. After Indonesia gained its independence
in 1945, the cooperative was explicitly incorporated as the basis of a nation-based economy based on article 33
paragraph one of the 1945 Constitution.
Until 2016, the number of cooperatives in Indonesia reached 212,135 units with a total membership of
37,783,160 people (Ministry of Cooperatives and SMEs, 2016). Of those cooperatives, 30% were inactive for
various reasons. There are several factors that trigger the cooperatives were inactive, such as the low human
resources of cooperatives, cooperative management was not professional, cooperative members' participation
was still lacking and mastery of the technology was inadequate. Besides, there were some cases of cooperatives
that did deviations in managing cooperatives, so that the distrust of the community to cooperatives was
increasing.
Looking at the releases issued by the International Cooperative Alliance (ICA) in www.monitor.coop,
many cooperatives in the United States fill the list. 300 major cooperatives in the world, the first rank was a
cooperative Zenykoren from Japan that engaged in the insurance sector. Followed by Acdlec Electry Coop
France, in the trade and services sector, and ranked third was the State Farm United States that engaged in the
insurance sector. The cooperative of Indonesia, Gresik cement co-operatives were ranked 232 in 2013 and
ranked 210 in 2012. Meanwhile, according to the Minister of Cooperatives and SMEs, Gede Puspayoga (2016),
Indonesia managed to penetrate the world's cooperative, the Telkomsel Cooperative (Kisel) which was ranked
123 out of 300 world cooperatives. Of the 300 best cooperatives in the world, Indonesia has only one co-
operative, while the United States has the 100 best cooperatives from the top 300 cooperatives in the world.
Based on the above background, this study aims to evaluate the contribution of cooperatives to the
Indonesian economy. Cooperatives also contribute to reducing poverty, unemployment and improving people's
welfare (DeVille et al., 2007). In addition, cooperatives in Indonesia are able to absorb labor by 0.5% of the
total working population (Ministry of Cooperatives and SMEs, 2016).
To achieve the purpose of this study, this study used descriptive analysis. This study focuses on the
existing data on cooperatives, such as capital, turnover, profit, and cooperative labor.
The rest of the study is organized in the following sections. Section 2 provides the literature and
discussion of the results, and section 3 concludes the paper.
The Role of Cooperative in the Indonesian Economy
www.ijhssi.org 44 | Page
Capital, Turnover and Profit of the Cooperative
Cooperatives established for the welfare of members and society in general. The cooperative has values
based on self-help, self-responsibility, democracy, equality, equity and solidarity (ICA, 1995). Cooperative in
running its business is more concerned with its members than to seek the maximum profit that is commonly
done by business entities other than cooperatives. However, far from the purpose of seeking profit, the
cooperative has a basic purpose to improve the welfare of members in particular and society in general.
Cooperatives run their business in accordance with the needs and economic efforts of its members. Laurinkari
(2004), states that the purpose of the cooperative is the empowerment not only on economic, but social and
psychological for its activities. This means that the cooperative is not solely aimed at making a profit but far
from it is to achieve prosperity together. Cooperatives put forward the strength of members rather than the
strength of capital (Henzle, 1960). According to Michelsen (1994: 16) Cooperative is a membership
organization that can determine business. It can be understood that members of the cooperative are run by
members as users of the services / goods and as business owners of the business.
In running its business, cooperatives develop member economic business, not non members. Because
the purpose of the cooperative is basically to improve the welfare of members. However, it does not rule out the
possibility of cooperatives can obtain benefits that can be distributed to members. Royes and Smith (2007) state
that the cooperative will return the revenues earned to its members or the number of patrons to be allocated to
members and can also be saved for future use as capital. Basically, the cooperative is not intended to seek profit,
but to maintain the business continuity of the cooperative needs to gain profit, known as SHU (Residual Result
of Business).
Data show during the period of 2010-2015, turnover and profit of cooperatives have increased. In 2010
the cooperative in Indonesia earned Rp5.6 trillion in profit with a business volume of Rp76.8 trillion, profit and
the volume of cooperative business was Rp6.3 trillion and Rp95 trillion in 2011. Then in 2012 the cooperative
profit reached Rp6.6 Trillion and turnover of cooperatives Rp119.2 Trillion. Gain and business volume in 2013
Rp8.1 Trillion with total profit Rp125.5 Trillion. In 2014 the volume of business and profit cooperatives earn
Rp189.8 Trillion and Profit Rp14.8 Trillion, the last in 2015 total profit and business volume obtained by
cooperatives each Rp17.3 Trillion and Rp266.1 Trillion. Average percentage increase in 2010 to 2015 reached
5-7%. It identifies that cooperatives can contribute to the Indonesian economy.
Meanwhile, cooperative capital in Indonesia during the last six years also increased. In 2010 the total
capital of cooperatives amounted to Rp64,7 trillion, then in 2011 and 2012, the amount of capital collected by
cooperatives amounting to Rp75,4 and Rp102,8 trillion. Capital in 2013 reached Rp170, 3 trillion or an increase
of 40% from the previous year. Total capital in 2014 and 2015 amounted to Rp200.6 and Rp242.4 trillion.
Broadly speaking, the amount of capital from 2010 to 2015 has increased quantitatively. In 2013 the rate of
capital increase reaches 40% from 2012. While in the year before and after 2013, the rate of increase in capital
only ranges from 14% to 26%. This is because in 2013 the number of active cooperatives reached 143 thousand
more with the number of cooperatives 203,701 units of cooperatives. In addition, in 2013 the existence of the
cooperative society movement launched by the ministry of cooperatives, at the international level the world
organization of the United Nations declared in 2012 as the year of cooperatives, so that affect the development
of cooperatives in 2013. The impact of the policy is that people are interested to join to become a member of the
cooperative. And this will implicate the growth of the value of capital in cultivation by members of the
cooperative against the cooperative.
Fig 1. Number of Profit, Turnover and Capital of Cooperatives in Indonesia
Cooperative and Economic Growth Indonesia
In article 33 of the 1945 of the Constitution, the foundation of economic democracy, the prosperity of
society is preferred, not the prosperity of a person. Therefore, the economy is structured as a joint effort based
The Role of Cooperative in the Indonesian Economy
www.ijhssi.org 45 | Page
on the principle of kinship. Build a company that suits it is a cooperative. But until now the role of cooperatives
has not been so visible to the Indonesian economy.
Burhanuddin (2013) states that, to date, we have not been too happy with the role that has been played
by the cooperative in the Indonesian economy. We may tend to wonder how big the role of cooperatives in our
economy. We need data. The information is somewhat less accurate and may not be accurate. Clearly the role of
cooperatives in the formation of our GDP is very small (Prof. Mubyarto once estimated about 2%, Bambang
Ismawan once mentioned 5%). Compare for example with Finland 21%, New Zealand 22%, Switzerland 16.4%
and Sweden 13%, even in newly developing Kenya, the cooperative has a 45% GDP share.
According to the minister of Cooperatives and SMEs of the Republic of Indonesia (2016), the
contribution of the cooperative sector to the Gross Domestic Product of Indonesia is only 1.7%; this figure is
very small when compared with other sectors. However, cooperatives are an important part of the economy in a
developing country because it can lead to realistic income, because cooperatives also contribute to reducing
poverty, unemployment and improving people's welfare (DeVille et al., 2007).
Cooperative and Manpower Absorption
In terms of employment, the cooperative sector is only able to contribute 0.5% of the total population
working in Indonesia. Based on data from the Central Bureau of Statistics (2016), the number of Indonesians
working as many as 186,100,917 people in 2015, while the labor absorbed in the cooperative sector is only
574,451 people. In other words, the number of cooperatives that reaches hundreds of thousands is only able to
absorb the workforce of less than 1% of total workforce in Indonesia. In 2010, the number of workers absorbed
by the cooperative reached 358,768 people. In 2011 the number of employees of the cooperative amounted to
377,236 people, there is an increase in labor by 5% from 2010. In 2012 and 2013 the absorbed workforce
reached number 431,506 and 473,604 people, while in 2014 the absorbed workforce of 567,445 people, in other
words an increase of 16% from 2013.
Recommendations for Strengthening the Role of Cooperatives in the Indonesian Economy
In quantity, the number of cooperatives in Indonesia reaches hundreds of thousands, but the active ones
was only 30% with various kinds of problems. Among the problems that arise are the low resources of managers
and participation of members. Members of the cooperative have a dual function that is as owner and user.
Cooperatives are unique, members are service users provided by cooperatives (Marwa and Aziakpono, 2014).
Therefore, to increase the level of participation of members of the cooperative, it requires continuous member
education in the hope that the productivity of the cooperative will increase. Similarly, the manager of the
cooperative, not only the pursuit of the number of members of the cooperative, but must be coupled with the
participation of members.
The role of government is also needed as a catalyst and facilitator for cooperatives. Various classical
problems experienced by cooperatives in Indonesia, such as business climate, capital and financing, and the low
human resources of cooperative people. The Government can make various efforts to help solve the problem
include: 1) Providing maximum space with the creation of a conducive climate, easy access to capital for
cooperatives and business development efforts and business cooperation; 2) Improving counseling/training and
counseling of cooperatives for managers, supervisors and officers of cooperative coaches in a sustainable
manner, through pilot projects in several provinces, which later as a model for the development of cooperatives
in Indonesia; and 3) Encouraging the perpetrators of Micro-Small and Medium Enterprises (MSMEs) to
establish cooperatives jointly at the district, provincial and central levels. Thus, the cooperative logo or symbol
as the “sokuguru of Indonesian economy become materialized and not just as jargon only.
II. Conclusion
This study aims to describe the performance and expectations of cooperatives in Indonesia. The
number of cooperatives in Indonesia reaches 212,135 units with a total membership of 15% of the total
population of Indonesia. 30% of cooperatives in Indonesia were inactive for various reasons. Percentage of
cooperative contribution to Indonesia's gross domestic product is below 2%. While the absorption of labor, the
cooperative is only able to absorb 0.5% of the entire working population of Indonesia. Some suggestions to
enhance the contribution of the cooperative to the national economy as follows: (1) Increasing the participation
of cooperative members; (2) Providing a conducive climate for cooperatives, access to finance and business
development; (3) Increasing counseling and training for managers, supervisors and apparatus for co-operatives;
and (4) Encouraging Micro-Small and Medium Enterprises (MSMEs) to establish secondary cooperatives.
The limitation of this research is in its use of aggregate level of cooperative data as a whole, regardless
of cooperative type, such as saving and loan cooperative, agricultural cooperative, plantation and civil service
cooperative. Future researchers are advised to identify which types of cooperatives contribute more to the
Indonesian economy.
The Role of Cooperative in the Indonesian Economy
www.ijhssi.org 46 | Page
Reference
[1]. Aini, Hafizah and Zuaraini. (2012). Factors affecting cooperatives‟ performance in relation to strategic planning and members‟
participation. Procedia - Social and Behavioral Sciences, Vol.65, pp.100-105.
[2]. Altman, Morris. (2015). Cooperative organizations as an engine of equitable rural economic development. Journal of Co-operative
Organization and Management, Vol.3,pp.14-23.
[3]. Anuu, Kaarina, Antti. (2013). Mission lost? Dilemmatic dual nature of co-operatives. Journal of Co-operative Organization and
Management, Vol.1, pp.6-14.
[4]. Ariyaratne, Featherstone and Michael. (2006). What determines productivity growth of agricultural cooperatives? Journal of
Agricultural and Applied Economics, Vol. 38, No. 1, pp. 47-59.
[5]. Badan Pusat Statistik. 2010-2015. Statistik Indonesia. BPS. Jakarta.
[6]. Baswir. (2000). Koperasi Indonesia.Erlangga: Jakarta.
[7]. Burhanuddin, Abdullah (2013). Peran koperasi dalam perekonomian Indonesia, Makalah: Ikopin: Bandung.
[8]. Carini and Carpita. (2014). The impact of the economic crisis on Italian cooperatives in the industrial sector. Journal of Co-
operative Organization and Management, Vol.2, pp.14-23.
[9]. Detik Finance (2016, 26 Januari). Koperasi di RI Terbesar di Dunia, Tapi Sumbangan ke PDB Hanya 1,7%.
https://finance.detik.com/berita-ekonomi-bisnis/3127189/koperasi-di-ri-terbesar-di-dunia-tapi-sumbangan-ke-pdb-hanya-17.
Accessed in July 2017
[10]. DeVille, K.C. et.al. (2007). Farmer Cooperative Statistics, 2006. In: R.D. United States Department of Agriculture, Editor,
Washington, D.C.
[11]. Francescone. (2015). Cooperative miners and the politics of abandonment in Bolivia. The Extractive Industries and Society, Vol.2,
pp.746-755.
[12]. Friedman, Jhon. (1992). Empowerment: The Politics of Alternative Development. Blackwell. Cambridge.
[13]. Fukuyama, Guerra and Weber. (1999). Efficiency and ownership: evidence from Japanese credit cooperatives. Journal of
Economics and Business, Vol. 51, pp.473487.
[14]. Galor, Zvi (2014). The cooperative components of the Classic Moshav. Journal of Co-operative Organization and Management,
Vol.2, pp.83-91.
[15]. Goel and Haruna. (2007). Cooperative and non-cooperative R&D with spillovers: The case of labor-managed firms. Journal of
Economic System, Vol.31.No.4, pp.423-440.
[16]. Goel, Sanjay. (2013). Relevance and potential of co-operative values and principles for family business research and practice.
Journal of Co-operative Organization and Management, Vol.1.pp.41-46.
[17]. Gupta, Clare. (2014). The co-operative model as a „living experiment in democracy. .Journal of Co-operative Organization and
Management, Vol.2, pp.98-107.
[18]. Hannan, Rowshan. (2014), The institution of co-operation: A pathway from governance to spillover and poverty reduction. Journal
of Co-operative Organization and Management, Vol.2, pp 3442.
[19]. Hamidi. Liao and Ference. (2016). Non-cooperative and cooperative game-theoretic models for usage-based lease contracts.
European journal of operation research, Vol.225, pp.163-174.
[20]. Henry, Hagen. (2013). New opportunities for co-operatives: New opportunities for people. Journal of Co-operative Organization
and Management, Vol.1, pp.47-48.
[21]. Henzler, R. (1960). Osuuskunta yritysmuotona ja ja¨sentensa¨ tukena. Helsingin Yliopiston osuustoimintainstituutti (Original:
Henzler, R. 1957. Die Genossenschaft eine fo¨rdernde Betriebswirtschaft).
[22]. International Cooperative Alliance. (2016). <http://ica.coop/en/whats-co-op/co-oper-ative-facts-figures> Accessed in July 2017.
[23]. Kementrian Koperasi dan UKM. (2016). Jumlah koperasi, Investasi, Tenaga Kerja, SHU, Omset koperasi. Kemenkop. Jakarta.
[24]. Laurinkari, J. (2004). Osuustoiminta Utopiasta Kansainva¨lisen Yritta¨misen Muodoksi. Kuopio: Suomen Graafiset Palvelut Oy.
[25]. Lukman. (2011). Pengaruh Jumlah Modal Sendiri dan Jumlah Modal Luar terhadap Sisa Hasil Usaha melalui Variabel Volume
Usaha pada Koperasi-Koperasi di Kota Lhokseumawe. Ekonis, Vol.10, No. 1, pp. 1-11.
[26]. Michelsen, J. (1994). The rationales of cooperative organizations. Some suggestions from Scandinavia. Annuals of Public and
Cooperative Economics, Vol. 65, pp. 1334.
[27]. Nasution, Muslimin. (2008). Demokrasi Ekonomi Koperasi. PIP. Jakarta
[28]. Othman, Kari, Jani and Hamdan. (2012). Factors influencing cooperative membership and share increment: an application of the
logistic regression analysis in the Malaysian Cooperatives. World Review of Business Research, Vol. 2, No. 5, pp. 24 35.
[29]. Pathak, Raghuvar Dutt & Kumar, Nirmala D. (2008) The key factors contributing to successful performance of cooperatives in Fiji
for building a harmonious society, International Journal of Public Administration, Vol. 31, No. 6, pp. 690-706.
[30]. Royer, J.S. & D.B. Smith. (2007). Patronage Refunds, Producer Expectations, and Optimal Pricing by Agricultural Cooperatives.
Journal of Cooperatives, Vol. 20, pp. 1-16.
[31]. Syamni and Majid (2016). Efficiency of Saving and Credit Cooperative Units in North Aceh Indonesia, Signifikan: Jurnal Ilmu
Ekonomi Vol.5, No.2, pp. 99 118.
[32]. Undang-Undang No. 25 Tahun 1992 Tentang Perkoperasian
[33]. Xie, Gang. (2016). Cooperative Strategies For Sustainability In A Decentralized Supply Chain With Competing Suppliers. Journal
of Cleaner Production, Vol.113, Pp. 807-821.
Azhari., Syechalad, M.N., Hasan, I., and Majid, M.S.A. “The Role of Cooperative in the
Indonesian Economy”. International Journal of Humanities and Social Science Invention
(IJHSSI), vol. 6, no. 10, 2017, pp. 4346.
... Such organizations, which also contribute to national gross domestic products [9,10] are the foundation underpinning the Indonesian economy [11,12]. In line with Wahyudi and Aini [13] the Indonesian economy could be catalyzed through cooperative system implementations despite its emphasis on cooperative members rather than profitability [6,14]. ...
... Cooperative performance, which serves and influences other members, characterizes cooperative organizational goals and functions [15][16][17]. In this vein, cooperative organizations performance may surpass profit-making to attain collective wealth [14,16]. Cooperative organizations optimally enhance their members' economic income [18] and social welfare [12,13,19]. ...
... Cooperative management must emphasize several criteria for cooperative performance. Inferentially, cooperative performance proves inadequate when only evaluated on a financial basis due to its service-oriented nature [14,17]. Financial and non-financial performance function as indicators to measure cooperative performance and ensure the organizational focus on progress for members' benefit. ...
Article
Full-text available
This research aims to develop a cooperative performance measurement for cross-cultural adaptation in Indonesian organization It consists of adapted measurement, initial translation, translation synthesis, back-to-back translation, expert reviews, and pilot test. Organizational performance measurement was adapted in the current research. This research used three cooperative experts (academicians, cooperative boards, and government authorities) who duly reviewed the adaptation. A total of 35 cooperative boards participated in the pilot test to ensure measurement reliability. In the current research, the cooperative performance measurement consists of financial and non-financial performance. Financial performance focused on measuring performance in the sales context, return on sales, return on equity, and venture capital. While non-financial performance includes new product introductions, product quality, the total number of cooperative members, the efficiency of product or service marketing strategies , increased company value, and technical advancements. The finding indicates all items of this research were reliable and valid to measure performance of cooperative organization. A cooperative organization is pivotal for the social welfare of its members because it is the cornerstone of national economic progress. Therefore, financial and non-financial performance were appropriately assessed to evaluate cooperative organization performance. Moreover, practitioners and researchers are able to improve the performance of cooperative organization as a whole through financial and non-financial performance.
... Another research finding was the lack of businesses' networks. Azhari et al (2017) stated that the lack of engagement from members, the cooperative's management's low capability, unprofessionalism are caused the cooperative unable to achieve the goals. Martini et al. (2017) stated humans are the most important development resources among other resources that must constantly build capacity and power as implementers and drivers of cooperative' development. ...
Article
The role of cooperative is important for Indonesian Economic, especially for low and medium level of society incomes. This study investigates the contribution of employees on cooperative business. The study objects are secondary cooperatives where their members are primary cooperatives. The sample were selected based two criteria, as such (1) the cooperative businesses were active and (2) the cooperative performed members’ annual forum since last three years. Out of 22 secondary cooperatives in the Riau Province, there were six of them satisfied the criteria. The respondent of this study is cooperative boards and employees. The study conducted for six months, from October of 2022 to April of 2023. This study findings indicated that role cooperative boards on the cooperative business development were 71% which were more dominant compared to those of employees which was only 29%. The cooperatives’ businesses did not develop at all and nearly stagnant since last three. Almost all Indicators which were growth of assets, internal equity, business’ volume, and net profits, applied in this study were negative. Low role (contribution) of the employees on the cooperative business development, seen main cause of the bad cooperative financial performances. This study concluded that, in descriptive approach, there weas relation between employees’ contribution and cooperative businesses performances. For the cooperatives to develop in the future, the role/contribution of the employees need to be increased.
... Indonesia's underperformance, looking from the fact that it is one of G20 member, in the global Islamic finance industry compared to other Muslim and non-Muslim countries, as indicated by annual reports from global Islamic finance indexes, the legal framework for BMTs remains unavailable, causing legal uncertainty in its unique structural formation (Prasada, E., J., & K., 2020). Aside from the lack of its specific legal basis, BMTs also are exposed to challenges the cooperatives face in Indonesia among others the inactiveness which leads to the measly overall contribution of cooperatives to the Indonesia's gross domestic product with less than 2 %. (Gito, Syechalad, Hasan, Shabri, & A., 2017) This is the difference between Indonesia whose constitution regards cooperatives as indigenously constitutional financial institutions and German and the other European countries which have supported the cooperative banking model since more than two centuries ago (Guinnane, 2012). However, regardless of the political will and legal issues discussed above, BMTs has successfully improved the prosperity of Small and Middle Enterprises (SME) and ameliorate financial exclusion of the impoverished (Suseno, 2020) with more sounding financial formation encouraging equity as aspired by Islamic economics. ...
Article
Full-text available
This research explores the intersection of participatory and social financing within the framework of Islamic Moral Economy (IME). The study delves into the nature of participatory and collaborative Islamic finance instruments and their alignment with the principles of IME. It also investigates the concept of Islamic social finance and its relationship with the idea of welfare in the context of IME. The paper further examines contemporary approaches to institutional adaptation in Islamic finance, focusing on how these approaches integrate participatory and social financing principles. Qualitative methodology By employing a rigorous literature review and in-depth analysis is utilized to gain insights into the practices and implementations of Islamic financial institutions in Indonesia. The findings shed light on the significance of the framework of Islamic Moral Economy in Islamic financial practices and its potential for promoting financial inclusion and socio-economic welfare to develop moral and community-centered financial models
... The increase in the number of cooperatives which has reached 153,171 units as of December 2019, explains that the existence of the people's economic movement is increasing, thereby encouraging the Indonesian economy. [2]. ...
... Setiap badan usaha akan menghadapi lingkungan dengan intensitas persaingan yang tinggi termasuk koperasi. Koperasi harus mampu bersaing dengan badan usaha lain guna mensejahterakan anggotanya (Azhari et al., 2017). Akan tetapi realita di lapangan, yang terjadi adalah penerapan SDM dan Teknologi informasi terkesan asal jalan. ...
Article
Full-text available
To grow and compete in today's free trade, some companies have to adapt to the intense business competition. The need for qualified human resources and the availability of information technology facilities are one of the components that ensure that a company's business is successful. KPRI NBB XYZ Semarang is no exception in gaining a sustainable competitive advantage. The purpose of this study is to determine the role of human resources and information technology as a competitive advantage at KPRI NBB XYZ Semarang. The research method used is qualitative where data collection is by means of interviews and documentation studies of internal cooperative data. Data analysis using VRIO (Valuable, Rare, Inimitable, Organization). The results of this study indicate that, of the 6 (six) human resource indicators of KPRI NBB XYZ, there are 5 (five) that have a sustainable competitive advantage and 1 (one) is in competitive parity. Then for the information technology variable, of the 5 (five) indicators there are 4 (four) competitive disadvantage categories and 1 (one) indicator that has a sustainable competitive advantage. In general, the existence of Cooperative Human Resources has a sustainable competitive advantage but this is not supported by adequate Information Technology, so that KPRI NBB XXX Semarang has not been able to obtain a sustainable competitive advantage and become excellent in front of its members
... Upaya koperasi untuk meningkatkan perekonomian rakyat masih terlalu kecil jika dibandingkan dengan seluruh penduduk Indonesia yang bekerja (Syechalad, Hasan and Majid, 2017). Beberapa saran untuk meningkatkan kontribusi koperasi terhadap perekonomian nasional adalah sebagai berikut, Meningkatkan partisipasi anggota koperasi memberikan iklim yang kondusif bagi koperasi. ...
Book
Full-text available
The Cooperative Management Book consists of 9 chapters arranged sequentially, namely Chapter 1 Basic Concepts of Cooperatives Chapter 2 Basic Concepts of Management Chapter 3 Management in Cooperatives Chapter 4 Management of Cooperatives Chapter 5 Management of Services to Cooperative Members Chapter 6 Management of Cooperative Marketing Chapter 7 Strategic HRM in Cooperatives Chapter 8 Sharia Cooperative Chapter 9 Cooperative Entrepreneurship
Article
Koperasi merupakan bentuk organisasi bisnis yang dimiliki dan dioperasikan oleh orang-seorang demi kepentingan bersama. Modal koperasi dapat dikatakan sebagai ‘katalis’ dalam menggerakkan kelancaran penyelenggaraan usaha koperasi. Struktur modal merupakan hal penting bagi koperasi karena baik buruknya struktur modal akan mempunyai efek langsung terhadap posisi finansial koperasi., diantaranya adalah dinamika perkembangan aset dan SHU. Koperasi merupakan salah satu sektor ekonomi di Indonesia yang berpotensi untuk dikembangan. Tulisan ini bertujuan mengembangkan penelitian-penelitian sebelumnya dengan menyajikan telaah mengenai keluasan konsep struktur modal koperasi simpan pinjam (KSP), dan bagaimana keberadaan LPDB sebagai bagian dari program pemerintah yang dikeluarkan Kementerian Koperasi dan UMKM, mampu berpengaruh optimal menjadi bagian dari struktur modal KSP tersebut. Keberadaan peran LPDB dapat dimaksimalkan sebagai BLU (Badan Layanan Umum) Kementerian Koperasi dan UMKM. Penelitian ini menggunakan metode kualitatif, yang diharapkan dapat memberikan manfaat dalam praktek berkoperasi di Indonesia.
Article
Full-text available
p>This article aims to examine the role of cooperatives in supporting the strengthening of MSMEs Convection Cloth Masks during the Covid-19 pandemic.This study uses empirical research methods. This legal research uses legal resources in the form of legal materials both primary legal materials and secondary legal materials. The data types used are Secondary data and Primary data. Data collection techniques are used through literature studies, interviews, and data analysts. The results showed that cooperatives play an active role in supporting the strengthening of MSMEs Convection in Pati Regency. </p
Chapter
This chapter investigates the conditions and enablers of success for women’s small businesses based on the study of the Indonesian context. It argues that the concept of a people’s economy employed by the government and appropriate interpretations of Islam by Muslim women’s organisations together have facilitated the growth of female entrepreneurship. This chapter provides a historical overview of the government’s policies, the context of an Islamic economy, and responses of Muslim organisations to women being involved in small businesses. All of these factors have created suitable conditions that assisted women, especially those of the middle class, in becoming Muslim mompreneurs.KeywordsEmpowermentGovernment policiesIndonesiaIslamMompreneursSMEsWomen
Chapter
Sustainability has become one of the strategic essential in the 4th industrial revolution era. Most cooperatives strive to endure a sustainable development on economic, organizational, social, and environmental. In today’s competitive market environment, for cooperatives to achieve sustainability, many of them rely on business sustainability models to highlight the logic behind cooperative value creation and its potential impact. There are previous studies that explored the continuous development of cooperatives from various perspectives. However, only a small portion of information is known about factors influencing cooperatives’ sustainable development, especially in Malaysia. Therefore, this study aims to address this gap by exploring this phenomenon. For the methodology approach, a set of three different case studies were conducted through protocol discussion with Malaysian cooperatives across various sectors. This was done to learn more about the topic, enhance the research questions, and expand the ideas. The findings of the qualitative investigation revealed several determinants, which led to the following themes: (i) members’ participation; (ii) governance management; (iii) business strategy; (iv) resource management; and (v) leadership. The qualitative methods used yielded rich information that will guide future research. In brief, this study contributes to the existing literatures in cooperative and sustainable development knowledge and will benefit future research.
Article
Full-text available
The cooperative society plays significant roles towards the economic development in Malaysia. It was first established in 1922 to protect the welfare of rural people and has expanded its establishment until today. With the aim to help its members, it is said that cooperative needs to accelerate its performance. However, there are issues regarding its weaknessess, especially in the management, financial and members’ participation. Therefore, this study aims to identify the factors influencing its performance through strategic planning and members’ participation. Questionnaires constructed have been distributed among cooperatives board members in Kota Setar District, Malaysia. The findings provide guidance for the cooperative to improve its shortcomings performance towards realizing the National Cooperative Policy 2011-2020.
Article
Full-text available
The purpose of this study is to measure and analyze the relative efficiency of saving and credit cooperative units in North Aceh, Indonesia. In this study, the selection of inputs and outputs to be analyzed by the Data Envelopment Analysis (DEA) was selected using the intermediation approach. The results showed that the overall saving and credit cooperative units in North Aceh, Indonesia have not operated fully efficient. This is indicated by the average of value of Malmquist Productivity Index which was still below one, but individually the study found that some cooperatives have operated efficiently, such as cooperative employee of PT Pupuk Iskandar Muda (Persero), KPN Kopebun, KPN Citra Guru, KPN Tunas and Kopbun Cut Mutia. These findings implied that more serious efforts should be made by the saving and credit cooperative units in North Aceh, Indonesia to improve the cooperative management efficiency levels by managing their capital and assets professionally. DOI: 10.15408/sjie.v5i2.3193
Article
Full-text available
It is time, 90 years after the establishment of the first Moshav, family farm based settlement in Israel, to examine the idea of the Moshav and its transformation over the years. This article attempts to examine the initial group of Moshav type rural settlements, established during a limited period of time from 1921 to 1950 and which is termed in this article as the Classic Moshav. This type of settlement, a particular model of a cooperative village, is also a multi-purpose cooperative association containing maximum number of cooperative functions, and is characterized by a defined geographical space. The principles of this particular settlement were defined in a period where the economic conditions were unfavourable to the pioneers who settled the Land of Israel in order to make their living from farming. Once the economic and social conditions have changed, 70 years later, the existence of these principles and their cooperative components have been questioned. The complete identity between the village and the cooperative at its base which was unique phenomenon has been redefined. The article makes an attempt to describe and to examine the changes in the model of the Classic Moshav, in its cooperative components and its uniqueness.
Article
Full-text available
In this article I present a pathway to understand the links between co-operative governance and poverty reduction in developing countries. This unpacks the relationships between the different internal and external actors in co-operative governance, and the different processes (or areas of activity that the co-operative is engaged in). I examine how a balance can be achieved in the relationships, and how this can then affect the balance in the economic and social goals of the process areas, all of which can lead to a spillover effect impacting poverty. I also discuss social capital, and its place within co-operative governance. I explore how the relationships and processes influence the building and deployment of social capital by co-operatives to impact poverty at the household and village levels. I conclude by pointing to the importance of now operationalising the theories behind the pathway from co-operative governance to spillover, in order to fully understand its relevance for poverty reduction.
Article
In this paper, we study game-theoretic models for lease contracts, by which the owner (lessor) rents a piece of equipment to a user (lessee). The lessee decides on the optimal lease period and usage rate, and the lessor is responsible for developing a maintenance policy for the equipment. Two non-cooperative game-theoretic models and a cooperative model are developed to describe the relationships between the two decision makers. In the non-cooperative simultaneous move game, the lessee and the lessor act simultaneously and independently to make their decisions. In the leader-follower non-cooperative game, the lessor is the leader who specifies the maintenance policy first, and the lessee, as the follower, decides on the lease period and usage rate accordingly. For these two games, the Nash and Stackelberg equilibria are obtained respectively. For the cooperative game, we derive the solution targeting on total profit maximization and show that this solution can be implemented as an equilibrium using a nonlinear transfer-payment contract. Besides, we compare the Nash equilibrium, Stackelberg equilibrium, and the total maximum solution to each other, and our results show that the lessee and lessor can gain more profit from the cooperative contract than from the non-cooperative alternatives. Numerical examples are provided to demonstrate the different solution methodologies and the value of cooperation.
Article
In Bolivia, cooperative activities wield significant influence over national mining politics. They have become a powerful representational voice for the mining sector, generally supporting, rather than opposing, foreign investment. I use examples from cooperative partnerships with the transnational mining company, Coeur Mines, and draw on newly-released census data and findings from several visits to Bolivian underground mines to demonstrate how cooperative mining realities are intricately linked to those of the private and State-owned sectors. I argue that the historical development of cooperative miners, coupled with their experiences of poverty and exploitation, has shaped their experiences with, and thus reactions to, foreign investors following neoliberal restructuring. I conclude the article by drawing attention to the recent general strikes in Potosi as a way of challenging how much the situation has really changed for Bolivian mining cooperatives since the election of Evo Morales.
Article
Cooperatives represent an alternative to large-scale corporate farms as well as to independent unaffiliated small private farms. This article presents a comparative modeling narrative on cooperative organizational forms’ potential impact on equitable rural development. This speaks to issues of both increasing the size of the economic pie and how this income is distributed. The case is made that cooperatives can potentially generate higher rates of growth and more equitable growth, even in competitive economic environments. An important type of cooperative that is focused upon is one based on the linking of smaller farms into a cooperative. Economies of scale and scope as well in transaction costs can be captured by the cooperatives. Given cooperative governance, one would also expect higher levels of x-efficiency. Overall, cooperatives can generate relative high incomes to cooperative members, whilst remaining competitive with the traditional privately owned large farms. Critical to the success of the cooperative is a set rules and regulation that place them on a level playing field with the privately owned farm. In addition, the implementation and practice of cooperative principles are key to the success of the cooperative farm.
Article
Theories regarding the purposes and justifications of property guide in part the way in which American business enterprises are run today. This raises the question – if purely capitalist corporations are founded upon an understanding of property most in line with the theories of established property scholars Bentham and Locke, is there room for a different kind of concept of property in the realm of U.S. business? In this paper I explore the way in which the workers’ cooperative model infuses a sense of moral responsibility into a group of individuals’ understanding of “property” in order to create a collectively managed enterprise that measures success both in economic and socio-political terms. I first review a large body of literature on the various forms of cooperative ownership and management, focusing on the history of the co-operative model, the rights entailed under the model, and the advantages as well as criticisms associated with co-operatives. I then use this literature to situate a case study example of a co-operative organization – The Cheese Board Collective, a worker-owned artisan cheese and pizza shop in Berkeley, California – and to analyze my findings.
Article
The economic crisis has brought about renewed interest in co-operatives, not only among academics but also among members of society in general. Co-operatives are viewed as an alternative to the capitalist business model, which has long prevailed in the industrial sector. In addition, co-operatives are seen as a possible way in which companies in crisis can be reorganized so that people affected by the unemployment crisis can be reintegrated. Recent studies have demonstrated that in the face of negative shocks, co-operatives tend to decrease employment to a lesser extent than other types of organizations. Considering these premises, this study aims to analyze the economic situation of Italian co-operatives that operated in the industrial and supports service sector during the 2008–2010 period. The study aims to compare co-operatives to other forms of enterprises regarding the effects of the economic crisis on employment levels, economic performance, investment, and research and development. The study uses survey data from a sample of more than 25,000 Italian enterprises in the industrial and support services sector, including 3000 co-operatives. The survey provides a detailed view of the structure and key factors related to production and the competitiveness of enterprises.